Economy
-Manufacturing continues to weaken in Asia and Europe as purchasing managers indicated in surveys. 9/4
-Manufacturing contracted in the U.S. in August reaching its lowest level since July 2009. 9/5
-U.S. auto sales rose strongly in August up 20% from a year ago. 9/5
-More recent surveys indicate Europe is headed for a deeper recession as the downturn picked up steam in the summer. Retail sales fell in July and a purchasing manager’s survey signaled contraction for July and August driven by high unemployment and weak consumer confidence. 9/6
-The ECB announced a new bond buying initiative in an attempt to reduce interest rates in struggling Euro zone countries. The ECB plan called for unlimited bond buying of the bloc’s struggling members and was the boldest step the bank has taken to date to try to combat the crisis. In addition, it left its main policy rate at the record low level of 0.75%. 9/7
-The service sector has picked up its pace as the factory sector is slowing according to a report by ISM. 9/7
-The jobs report for August disappointed as only 96,000 new jobs were added falling well below expectations. Both June and July’s estimates for new jobs were also revised down. The unemployment rate did drop from 8.3% to 8.1%, however it was a result of more people giving up their search for work. The weak number could potentially give the Fed reason to act. 9/8
Corporate
-FedEx chopped its outlook for its fiscal first quarter citing increasing weakness in the global economy. The company’s most recent quarter end’s revenue came in below their reduced expectations. 9/5
-Amazon unveiled a new series in its Kindle Fire tablet products that are cheaper and offer more features than Apple’s iPad. 9/7
-Intel announced that is third quarter revenue would fall over a billion dollars short of their expectations as PC sales have weakened. 9/8
-Glencore, the world’s biggest commodities trader, made a new, $36 billion bid for Xstrata, a large owner of coal and other mining assets, in hopes of salvaging the deal at the last minute. The deal would create a company with a $70 billion market cap who would both mine and distribute commodities. 9/8
Market
-The announcement of the ECB plan was met by cheers on both sides of the Atlantic as markets soared to new multi year highs. The Dow jumped 1.9% and the S&P 500 soared 2.0%. The NASDAQ gained 2.2% to reach 3,135.81 hitting a level last seen near the peak of the internet boom in 2000. Europe leapt 2.3% on the news and Spanish and Italian bond yields fell. 9/7
-Stocks edged up on Friday after the weak jobs report led to expectations that the Fed will act. The S&P 500 gained 0.4% and the Dow rose 0.1%. The S&P 500 ended the week up 2.2% for its highest close since January of 2008, and the Dow is at its highest point since December 2007 as it finished up 1.6% for the week. Most of the week’s gains came from ECB’s announcement on Thursday for additional bond purchases. In Europe stocks advanced 0.2% Friday and Asian markets jumped up after the news out of Europe. Gold rose 2% on Friday to close at $1,737.5 on Fed intervention expectations. The 10 year Treasury ended at 1.66%. 9/8